AUSTRALIA: Foster's hit by US wine conditions
Foster's also said that it suffered a restructuring charge to its beer division of A$105.2m, which was taken to seek extra savings.
The company said normalized net profit, which is adjusted for significant items, amortization, and an accounting treatment of vineyard assets known as self-generating and regenerating assets, rose 9.1% to A$626.7m.
"Foster's has continued its pattern of steady underlying earnings growth, strong cash flows and improved returns, in a business environment that can only be described as one of the most challenging ever witnesses by the beverage industry," chief executive Ted Kunkel said.
However the company also said that the US wine market would continue to remain a challenging area in 2003-04. The strength of the Australian dollar and a glut of cheap wine meant earnings from Foster's wine division slumped in the second half of the year
There were some signs of an improvement. Kunkel said this year's California harvest could be down by around 5-7% on 2002 and the premium wine surplus was drying up.
"We believe we are currently near the bottom of the cycle in terms of oversupply," he said at a breifing.
But Kunkel also said that while the company would aspire to double-digit growth in normalized earnings a share in the current environment, "this will be difficult".
In 2004 a fiscal growth rate similar to this year's 7.8% increase in normalized EPS to 30.4 Australian cents, is more likely.
A revised assessment by Southcorp's independent expert has valued the company's shares closer to the bid value offered by Foster's Group....
Australian liquor giant Foster's bid for winemaker Southcorp is gathering momentum....
As one takeover story trundles on, another one has just moved up a gear....
The chief executive of Foster's believes the global premium wine industry is on the upturn....
Foster's Group Ltd is expected to announce that it is lifting its offer for fellow Australian Southcorp, transforming three months of corporate hostility into a friendly takeover....
Shares in Southcorp and Foster's have been halted from trading, pending an announcement....
Southcorp's share price has dropped below the offer price made by Foster's for the first time today (18 April)....
Foster's Group is considering upping its bid for Southcorp prior to extending its offer once again....
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